Introducing the Ron Paul Institute

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for Peace and Prosperity.

Ron Paul kicked off his newest initiative with this press conference earlier in the week. This message is truly a non-partisan one and I look forward to seeing the sort of information that is put out by this institution.

The inclusion of former congressman Dennis Kucinich in this venture is case in point. As I have said before (and echoing Murray Rothbard), I believe that the libertarian message on war and personal liberties is central to the whole philosophy. The non-aggression principle does not only apply to landlords for rent control or employers for the minimum wage. It must also be applied to instances where real matters of life and death are at stake.

Building coalitions with people who share similar ideas on issues is a necessity in moving the needle on strictly partisan issues such as this. The recipe has long been that those in power support the extensive and invasive foreign policy decisions of the president while the minority party decries its abuses, only to switch positions after the next election. This clearly will not do. A useful coalition must move beyond this superficial partisan bickering and trading of votes. I believe an institute that is steadfastly dedicated to the principles of peace and prosperity will certainly help in getting that started.

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Give Us Your Children!

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The progressive movement has long pushed for the collectivization of society. This is true in all areas of society as individual rights and responsibility have given way to the communal notion of shared responsibility and the common good. While the deconstruction of individualism has always been at the heart of the American progressive movement, it has seldom been so blatantly stated as in MSNBC’s Melissa Harris -Perry call for us to “break through our private idea that kids belong to their parents or kids belong to their family, and recognize that kids belong to the whole community.”

The collectivization of kids, in particular, is a central component of a communistic society, and this was recognized early on in the Soviet Union. Once the state (oh, I mean “we”) controls the education and formation of its children it can effectively groom a generation of like-minded supporters. At a congregation of Soviet educators in 1918 teachers were told “We must remove the children from the crude influence of their families. We must take them over and, to speak frankly, nationalize them”.

Education really is the key to a free society because free ideas will challenge and counter the monopoly a government-run education system seeks at its heart to achieve. Like the Soviet’s who sought to remove children from the influence of their parents and replace it with the influence of the state, the foundations of America’s modern public school system was founded on a similar mission. The “Father of American Education”, John Dewey was an ardent socialist and would appeal to similar notions of a collective good.

So while the notion that children are to be thought of as part of a collective is nothing entirely new, the boldness with which progressives now speak is an indication that they feel comfortable using obviously communistic language in the mainstream. (It should also be noted that MSNBC’s official slogan “Forward” is also quite reminiscent of Stalin’s propaganda campaign “Forward to Communism“).

Fitness, Health, and Liberty

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This lecture given by Dr. Doug McGuff is one of the most informative overviews of how we got into our current healthcare mess, the effects of Obamacare, and how to avoid being sucked into this medical abyss that I have ever seen. While it is somewhat lengthy (coming in at a little over an hour long), it is still a must-watch. While economics is often condemned as involving a decision-making process in the pursuit of only profit, Dr. McGuff explains that 1.) there is nothing ‘capitalistic’ about our medical system; and 2.) that doctor’s are faced without enormous non-monetary incentives that lead them make decisions that may not be in the patients best long-term interests. It is not the fault of individual doctors themselves, but the creation of a top-down medical system continues to create problems that are only exacerbated over time.

Watch this video. As Dr. McGuff explains, everyone’s best path is to avoid the healthcare morass is to “stay out of the belly of the beast”. Lifestyle choices are ours and ours alone.

The Social Function of Profits–The Importance of Prices in an Economy

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(Start video at 26 min 46 sec)

With the collapse of the Soviet Union, supporters of the free market who were foretelling the demise of the communist system were, for at least a brief time, vindicated in the eyes of the public. However, while it was obvious that the Soviet’s economic structure failed, it was much less obvious why it failed. The typical response given by conservatives is that there was an incentive problem that is inherent within a communist system: in an economy in which everyone receives equal pay, who is going to engage in the menial yet necessary jobs in society? And while this is a very valid point (economics is, after all, a discipline that studies the actions humans engage in when faced with different incentives and different opportunity costs), the intellectual debate would end with the claim that this new system would create a new “socialist man” that would respond differently to incentives. No matter what historical evidence that was offered concerning the failure of communism wherever it has been implemented, the response was the same: the capitalistic blood was still contaminating new “socialistic man”. The debate had reached a gridlock.

Lacking from the arsenal of the defender of the free market, however, are the contributions of Ludwig von Mises who had systematically dismantled the feasibility of a socialist economy decades before. While the incentive problem will certainly always plague a socialist economy (notwithstanding the creation of the mythical “socialist man”), there exists an even more fundamental flaw in the socialist framework: it ignores the central role that the price system plays in allocating resources in an economy. Regardless of how whimsical some may feel about the fluctuation of prices, they are not mere arbitrary numbers that business owners pick out of a hat on any given day. They represent in a very liquid manner the supply of resources and the demand that consumers have of the goods when arranged in a specific way. That is, they are a valuation of the resources required to bring about the satisfaction of consumers’ preferences.

Without prices that are determined by the supply and demand of a freely functioning economy, there is no way meaningful way to engage in economic calculation (ie. figuring out who wants how much of what). It was using this application of basic economic theory that Mises was able to fully combat the supports of communism in his day and foretell of the collapse of the system in an economically sound argument years before it occurred.

In this video, economist Robert Murphy explains the central role that prices play in allocating resources in an economy. True, market prices require the possibility of both profits and loses, and so whether it is the elimination of prices in a full-blown communist system or the mere distortion of prices (via price controls or subsidies) in an interventionist economy, the result is a misallocation of resources away from consumer-satisfied preferences. This disregard of the role of prices will inevitably lead to a collapse of a communist system or to economic busts within an interventionist system.

The important role that prices play is central to understanding how resources are allocated. Communism did not collapse simply because no one wanted to “take out the garbage”. There was a much more fundamental flaw within the system; this same fundamental flaw is still present within the interventionist economies around the world and is still distorting markets and contributing to the painful economic busts we continually feel.

Romney Advocates for Redistribution

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In an interview with 60 Minutes earlier this week Mitt Romney really let his true big government colors shine. In a discussion about taxes, Romney made it clear that while he supports lowering income tax rates, he has no intention of actually lowering the actual tax burden for most individuals. By “closing loopholes” and “eliminating deductions” for the wealthy Romney says his plan will more or less be revenue neutral, which means there is no plan to actually reign in the excessive levels of government spending. For those who have not seen through Romney’s limited government rhetoric for what it really is, this interview should be enlightening.
In the video posted here, Peter Schiff exposes Romney’s views for what they really are. Cutting through the rhetoric, Romney’s claim seeks to raise taxes on the rich and cut taxes for the middle class. Haven’t we heard that plan before? This is the same wealth redistribution policies of Obama, just framed in a different way. Add to this the fact that Romney has made preserving Medicare benefits from the “cuts” enacted by Obama as a central tenet of his campaign and his commitment of redistributing money from one demographic to another is confirmed.
The distinction between Romney and Obama on economic issues is much smaller than most Republicans will lead you to believe. As long as these are the economic values of the Republican leadership I don’t see much value to the party at all.